Every weekend Americans spend $20 million at theaters just to watch a Harrison Ford or Tom Hanks film. Video-rental stores are jammed, too. Add it up and the take is staggering. Units of 1980s investment partnerships that own small parts of various films are selling at deep discounts, too. Are these old units some kind of steal? And will Wall Street develop a fresher, perhaps more investor-friendly way to syndicate new films?
One the second point, don’t hold your breath. There hasn’t been a new public movie partnership since 1991. Investors are cool to partnerships’ high upfront fees. With the high production costs for today’s special-effects-laden movies, filmmakers are more likely to seek out private partners with megabucks.
Buyers are nosing around the oldies, though, speculating on them as yield sources because of dramatic declines in their prices. One example is Silver Screen IV, organized in 1987 and sold in $500 blocks by what was then Shearson Lehman Hutton. It’s quoted by the Chicago Partnership Board as selling for about $170 per unit now, but in July it made a $5 quarterly cash distribution.
Sounds like a 12 percent annualized “yield,” but there’s a catch: This isn’t a bond. A movie partnership’s holdings age, so you can expect Silver Screen IV to generate less revenue as its properties, which include hits like “Pretty Woman” as well as many forgotten losers, move from TV to bins in discount stores and into foreign distribution. And with other parties sharing whatever revenue sharing there is, the sum of all Silver Screen distributions per unit over its lifetime barely covers the $500 upfront cost.
GOOD NEWS ON PAY: IT’S RISING FASTER THAN LIVING COSTS
News reports of millions of new jobs, higher productivity and surging business profits rarely include positive talk about wages and salaries. But lately the trends have been upbeat. Wages are growing faster than the consumer price index.
For all private workers, pay rose 3.1 percent in the year ended June 30, while the consumer price index rose 2.5 percent. Moreover, year-over-year gains are impressive. In the year ending June 30, 1993, wages and salaries grew at a 2.7 percent rate, lagging the CPI’s 3 percent pace.
The outlook for 1995: Pay increases could be as much as 4 percent. If inflation holds or even bumps up a bit, Americans will see the best inflation-adjusted, across-the-board pay gains since 1986.
